Pound Hovers Near Three and Half Month Low


The British Pound Sterling, on Wednesday, May 2, held close to 3-1/2 month lows after Brexit-related news knocked the pound and as traders readied for data on the construction sector for any sign of an April rebound after weakness in the first quarter.

Sterling jumped 0.1 percent to $1.3630 against the dollar after earlier falling to $1.3581 in Asian trading, Reuters reports.

But against the euro sterling fell 0.2 percent to 88.24 pence per euro, its weakest since mid-March.

With the dollar rallying and a weak manufacturing survey published on Tuesday, sterling tumbled to its worst level since mid-January, extending a bruising fortnight for the pound in which it has fallen by around 7 cents because of a sudden collapse in expectations of an interest rate rise in May.

Media reports that senior British lawmakers that back Brexit have demanded that Prime Minister Theresa May drops a proposal for a customs partnership with the European Union once it leaves the bloc reignited concerns about a lack of British political unity about Brexit talks and undermined the pound.

“The pound has been under relentless downward pressure. The upturn in Brexit uncertainty surrounding the Customs Union debate is not helping,” MUFG analysts said in a note.

Attention now turns to a monthly business survey for Britain’s construction sector, due at 0830 GMT.

On Thursday, the survey for Britain’s vital services sector will be published.

Expectations of a Bank of England rate hike have fallen sharply in recent weeks as weaker-than-expected data makes the case for immediate tightening of monetary policy much harder.


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